LG to shut Solar Energy biz amidst mounting challenges

More than a year after pulling out of its smartphone business, LG Electronics has announced that it will be discontinuing its solar panel business owing to changing sector dynamics and impact of the Covid-19 pandemic.

The South Korean multinational electronics company also revealed that it took the step following a comprehensive review of the impact of increasing material and logistics costs, as well as severe supply constraints, in the solar business. 

The Seoul-headquartered firm has also revealed Solar panel production will continue until the second quarter this year to maintain adequate inventory for future service support. 

However, LG has maintained that it will keep supporting the existing customers for a period of time after the business’ closure has been completed. It also revealed that its LG’s Business Solutions (BS) Company, which operates the solar panel business, will reorganise its portfolio around the key pillars: Information Technology (IT) and Information Display (ID).  

“Going forward, LG will leverage its renewable energy expertise to unlock value for its customers. The company will concentrate on growth sectors and plug into a new era of sustainability through rapidly evolving products and solutions including Energy Storage System (ESS), energy management solutions and other yet-to-be-announced advancements,” LG said in a statement. 

LG has also maintained that employees who will not be continuing with the company will be offered transition support and severance packages commensurate with their tenure with the company. 

With Solar energy business increasingly becoming less sustainable, many global players are already divesting themselves from this business. Earlier, Softbank too exited India’s renewable energy business last year. The Masyoshi Son-led form sold its entire stake in SB Energy to Adan Green Energy for $3.5 billion, including debt.